page_title: Nazi–Soviet economic relations (1934–41)
section_title: Huge German and Soviet military demand growth
hierarchical_section_title: Nazi–Soviet economic relations (1934–41) / Nazi era and relations deterioration / Huge German and Soviet military demand growth
caption_attribution_description: For documentary purposes the German Federal Archive often retained the original image captions, which may be erroneous, biased, obsolete or politically extreme. "Tomka"- Ein deutsches Geheimunternehmen hinter den Eisernen Vorhang in den Steppen des Wolgagebietes bei Molsk in den Jahren 1928-1931. Information added by Wikimedia users.Deutsch: Tomka 52°7′19″N 47°5′49″E&#xfeff; / &#xfeff;52.12194°N 47.09694°E
context_page_description: After the Nazis rose to power in Germany in 1933, relations between Germany and the Soviet Union began to deteriorate rapidly, and trade between the two countries decreased. Following several years of high tension and rivalry, Nazi Germany and the Soviet Union began to improve relations in 1939. In August of that year, the countries expanded their economic relationship by entering into a commercial agreement whereby the Soviet Union sent critical raw materials to Germany in exchange for weapons, military technology and civilian machinery. That deal accompanied the Molotov–Ribbentrop Pact, which contained secret protocols dividing central Europe between them, after which both Germany and the Soviet Union invaded countries listed within their "spheres of influence".
  The countries later further expanded their economic relationship with a larger commercial agreement in February 1940. Thereafter, Germany received significant amounts of critical raw materials necessary for its future war efforts, such as petroleum, grain, rubber and manganese, while sending weapons, technology and manufacturing machinery to the Soviet Union.
context_section_description: German and Soviet demand for military supplies, already the subject of massive growth under their Four and Five Year Plans, increased even further after the Munich Agreement.  While both Stalin and Hitler had long spoken of an over-riding necessity to prepare for war, Hitler's outlook was for an offensive war, comporting with Nazi ideology, by a new community of Germans carving an empire across Europe, slaying the "Jewish Bolshevik" dragon and addressing punitive Treaty of Versailles provisions.
  The Treaty of Versailles restrictions had resulted in a very weak German military as late as the early 1930s, though planning efforts had been underway since the late 1920s for military growth in preparation for the next European war.  German military spending remained restrained during this period:   
  To get around Versailles restrictions, Germany and the Soviet Union collaborated to allow Germany to establish experimental centers in the Soviet Union for tank, chemical weapons and aviation research, while Soviet officers traveled to Germany for military instruction.  However, this secret collaboration ended with Hitler's rise to the Chancellery in 1933.  Immediately thereafter, Hitler ordered a tripling of German military size in one year. Germany instituted covert military increases, including ship production in excess of Versailles limits, while refusing to ever refer to its "General Staff" (which was prohibited by Versailles) and ceasing publication of its officer list.  On March 16, 1935, Hitler surprised world powers by passing a law openly requiring universal military service and further increasing military size to half a million men.  Countries including France and Britain protested, but did not act, effectively ending the pretense of military restrictions under Versailles.
  By 1939, three years into the Four Year Plan, over 20% of all German industrial workers worked for the armed forces, while nearly 33% of those in the manufacturing and building sectors worked there.  By comparison, in 1938, Britain and the United States produced just 13% of the quantity of weapons that Germany produced that year. German armament spending went from under 2% of gross national product in 1933 to over 23% in 1939.  German armament expenses under the Nazi regime increased rapidly, especially under the Four Year plan:
  Stalin viewed a coming war as occurring between imperialist powers, and in the late 1920s, had even predicted a massive war between the United States and Britain.  The Soviet military experienced almost proportionately identical massive increases nominally as that of Germany for military equipment and weapon designs to strengthen a  Red Army and Red Navy weakened by purges. While in the face of massive Soviet inflation in the 1930s, military spending increases were still enormous, the differences grow considerably when adjusted for inflation (Germany actually experienced deflation). From 1931 to 1934, the Soviet had purposefully published figures for military spending below actual levels.  Because of League of Nations publications requirements, the Soviets began more accurate defense spending publications by 1936.
  The Soviet Third Five Year Plan required massive new infusions of technology and industrial equipment. After Stalin's shock at the poor performance of Soviet aircraft in the Spanish Civil War and the "backwardness" of the Soviet Air Force in 1938, emphasis was put on military production, including that of large naval ships. By 1937, 17% of Soviet gross national product was spent on defense, while over 20% of industrial investment went to defense industries.  At the same time, military personnel increased from 562,000 in 1931 to just over 1.5 million in 1938. Meanwhile, the Soviet transportation network was woefully underdeveloped, with roads approaching non-existence and rail lines already stretched to their limits.
  The ambitious objectives of the Third Five Year Plan hinged upon the Soviet economy's importing large amounts of technology from the United States, which then supplied over 60% of Soviet machine and equipm
caption: German staff at Tomka chemical weapons facility, Soviet Union, 1928
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